Module 2: Part II
The Role of R&D in the Corporation:
Xerox as a Case in Point
Professor Nina D. Ziv
Polytechnic Institute of NYU
New York City, New York
Email: nziv123@gmail.com
Discussion Questions
 What is the role of R&D in the corporation?
 What should the relationship be between R&D and
the business of a company?
 What elements do you need to create a successful
company?
 Why did Xerox ‘fumble the future’ and fail to
capitalize on its innovations, e.g., GUI, mouse?
 What are challenges facing managers who manage
R&D organizations?
 What are the lessons learned from our study of R&D
in Xerox?
Xerox – What Went Wrong (1)
 Cultural tensions between freewheeling PARC people who
had little respect for business vs. bureaucracy (Burox)
and ingrained DNA of company (we are in the
copier/printer business)
 Bungled leadership --- lack of direction and continual
infighting among senior managers
 Pre-occupation of corporate headquarters with increasing
competition from the Japanese copier manufacturers
 Organizational structure of corporate parent which was
top down vs. ecological model of getting together on
particular projects which interested people
Copyright©2011 N.D. Ziv, Institute for Technology & Enterprise
Xerox – What Went Wrong (2)
 Emphasis on Professional Managerial Skills vs.
Recognizing the Value of Entrepreneurial Inspiration
and “Thinking Out of the Box”
 No mechanisms for transitioning technology to the
company’s manufacturing and marketing divisions
 Technologies such as the mouse were priced too high
to be commercially viable
 Isolation from the rest of the company both physically
and how PARC scientists thought of innovation and
themselves
Copyright©2011, N.D. Ziv, Institute for Technology & Enterprise
Xerox – What Went Wrong (3)
 Adherence to a short term time frame and plan vs.
long term scientific discovery process
 Lack of intellectual property licensing and patenting of
innovations
 No effective business models for the technologies the
company developed
 Relying on tried and true methods for reaching
customers and getting things done vs. using
technology strategically to foster communication within
the organization and facilitate relationships to
customers/partners
 Both sides did not learn and change so instead of
moving forward, company stagnates
Copyright©2011, N.D. Ziv, Institute for Technology & Enterprise
Lessons Learned - I
• Promoting Innovation Is Key To Excellence in Companies –
A Hybrid Model?
– Need for an agile organization which encourages both
incremental and discontinuous innovation
• Leadership Is Crucial –
– Lack of direction by senior leadership and PARC leadership
led in part to company problems. Need for committed and
facilitative leadership
• Culture Can Help Or Hinder Development Of Company
– Important to recognize historical legacy (914 copier) but not
to let ‘old culture’ impede innovation
• Organization Should Be Strong But Nimble Enough To
Change In Order To Remain An Excellent Company
– Importance of continual organizational learning
Lessons Learned - II
• Powerful relevant vision/strategy must be articulated
• Changing role of R&D in the corporation
– Perhaps new model needed which integrates R&D in the
company and which helps enable learning in the
organization
– Along with pure play R&D which takes place in the lab, R&D
must happen in concert with customers and other creative
partners in the larger networked environment
– In order to remain competitive, manager of R&D organization
must understand general business environment and be able
to enable inventions to become innovations.
– New investment in incremental aspects of R&D may be as
important as radical innovation
– Important to figure out where R&D part of the organization
should be located